INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2018

Income Tax Contingency [Line Items]

Net provision for income tax

The Company’s provision (benefit) for income taxes during the fiscal years ended September 30, 2018, 2017, and 2016 was as follows:

	2018			2017			2016
Federal
Current	$	—		$	0.1		$	0.1
Deferred	(22.7		)	67.7			62.0
Investment tax credits	(0.2		)	(0.2		)	(0.2		)
State and local
Current	2.2			0.5			0.6
Deferred	(5.8		)	9.5			7.0
Total income tax (benefit) expense	$	(26.5	)	$	77.6		$	69.5

Effective income tax rate variation from stated tax rate

The Company’s effective income tax rate varied from the federal statutory income tax rate for each year due to the following:

	2018		2017		2016
Federal income tax statutory rate	24.5	%	35.0	%	35.0	%
State and local income taxes, net of federal income tax benefits	3.4		2.8		2.8
Certain expenses capitalized on books and deducted on tax return	(2.3	)	(2.3	)	(3.4	)
Taxes related to prior years	(0.4	)	(0.9	)	(0.2	)
Tax law changes	(35.9	)	—		—
Amortization of excess deferred taxes	(1.8	)	—		—
Other items – net *	(1.6	)	(2.2	)	(1.7	)
Effective income tax rate	(14.1	)%	32.4	%	32.5	%

* Other consists primarily of property adjustments.

Significant items in net deferred tax liability

The Company’s significant items comprising the net deferred tax liability recorded in the Consolidated Balance Sheets as of September 30 were as follows:

	2018		2017
Deferred tax assets:
Reserves not currently deductible	$	25.9	$	31.5
Pension and other postretirement benefits	75.6		58.6
Operating losses	162.7		169.6
Regulatory amount due to customers, net	41.8		—
Other	8.2		26.0
Deferred tax assets	314.2		285.7
Less: valuation allowance	1.4		0.5
Total deferred tax assets	312.8		285.2
Deferred tax liabilities:
Relating to property	518.3		728.3
Regulatory pension and other postretirement benefits	117.1		108.0
Deferred gas costs	2.3		30.6
Other**	110.9		125.8
Total deferred tax liabilities	748.6		992.7
Net deferred tax liability	$	435.8	$	707.5

** Other consists primarily of Goodwill related liabilities.

The total amounts recorded, before reduction for amounts returned to customers, for the year ended September 30, 2018, are presented in the table below.

Adjustment to deferred tax liabilities	$	(318.3	)
Adjustment to deferred income tax expense	(75.0		)
Adjustment to regulatory assets	(75.9		)
Adjustment to regulatory liabilities	167.4

Unrecognized Tax Benefit Reconciliation

The following table presents a reconciliation of the beginning and ending balances of the Company’s unrecognized tax benefits:

	2018			2017			2016
Unrecognized tax benefits, beginning of year	$	11.0		$	10.0		$	7.1
Decrease related to tax law changes	(4.0		)	—			—
Increases related to tax positions taken in current year	1.2			2.4			3.4
Reductions due to lapse of applicable statute of limitations	(0.1		)	(1.4		)	(0.5		)
Unrecognized tax benefits, end of year	$	8.1		$	11.0		$	10.0

Spire Missouri

Income Tax Contingency [Line Items]

Net provision for income tax

Spire Missouri’s provision (benefit) for income taxes during the fiscal years ended September 30, 2018, 2017, and 2016 was as follows:

	2018			2017			2016
Federal
Current	$	—		$	—		$	—
Deferred	(26.1		)	42.0			37.5
Investment tax credits	(0.2		)	(0.2		)	(0.2		)
State and local
Current	—			—			0.1
Deferred	(6.3		)	5.7			8.0
Total income tax (benefit) expense	$	(32.6	)	$	47.5		$	45.4

Effective income tax rate variation from stated tax rate

Spire Missouri’s effective income tax rate varied from the federal statutory income tax rate for each year due to the following:

	2018		2017		2016
Federal income tax statutory rate	24.5	%	35.0	%	35.0	%
State and local income taxes, net of federal income tax benefits	3.4		2.8		2.8
Certain expenses capitalized on books and deducted on tax return	(4.6	)	(3.5	)	(4.8	)
Taxes related to prior years	(0.7	)	(1.4	)	(0.2	)
Tax law changes	(50.3	)	—		—
Amortization of excess deferred taxes	(3.6	)	—		—
Other items – net *	(2.5	)	(3.3	)	(2.8	)
Effective income tax rate	(33.8	)%	29.6	%	30.0	%

* Other consists primarily of property adjustments.

Significant items in net deferred tax liability

Spire Missouri’s significant items comprising the net deferred tax liability reported in the Balance Sheets as of September 30 were as follows:

	2018		2017
Deferred tax assets:
Reserves not currently deductible	$	20.0	$	25.3
Pension and other postretirement benefits	71.9		52.7
Deferred gas costs	0.5		—
Operating losses	65.2		52.0
Regulatory amount due to customers	38.0		—
Deferred tax assets	195.6		130.0
Less: valuation allowance	1.4		0.5
Total deferred tax assets	194.2		129.5
Deferred tax liabilities:
Relating to utility property	372.6		563.2
Regulatory pension and other postretirement benefits	113.4		108.0
Deferred gas costs	—		25.0
Other	69.2		57.1
Total deferred tax liabilities	555.2		753.3
Net deferred tax liability	$	361.0	$	623.8

The total amounts recorded, before reduction for amounts returned to customers, for the year ended September 30, 2018, are presented in the table below.

Adjustment to deferred tax liabilities	$	(285.3	)
Adjustment to deferred income tax expense	(57.0		)
Adjustment to regulatory assets	(78.1		)
Adjustment to regulatory liabilities	150.2

Unrecognized Tax Benefit Reconciliation

The following table presents a reconciliation of the beginning and ending balances of Spire Missouri unrecognized tax benefits:

	2018			2017			2016
Unrecognized tax benefits, beginning of year	$	10.7		$	9.7		$	6.9
Decrease related to tax law changes	(4.0		)	—			—
Increases related to tax positions taken in current year	1.1			2.4			3.3
Reductions due to lapse of applicable statute of limitations	—			(1.4		)	(0.5		)
Unrecognized tax benefits, end of year	$	7.8		$	10.7		$	9.7

Spire Alabama

Income Tax Contingency [Line Items]

Net provision for income tax

Spire Alabama’s provision for income taxes charged during the fiscal years ended September 30, 2018, 2017, and 2016, was as follows:

	2018		2017		2016
Federal
Current	$	—	$	—	$	(0.8	)
Deferred	81.5		31.6		29.4
State and local
Current	—		—		—
Deferred	0.1		4.2		3.8
Total income tax expense	$	81.6	$	35.8	$	32.4

Effective income tax rate variation from stated tax rate

Spire Alabama’s effective income tax rate varied from the federal statutory income tax rate for each year due to the following:

	2018		2017		2016
Federal income tax statutory rate	24.5	%	35.0	%	35.0	%
State and local income taxes, net of federal income tax benefits	3.8		2.8		2.8
Tax law change	70.0		—		—
Other items – net	0.1		0.3		0.1
Effective income tax rate	98.4	%	38.1	%	37.9	%

Significant items in net deferred tax liability

The total amounts recorded, before reduction for amounts returned to customers, for the year ended September 30, 2018, are presented in the table below.

Adjustment to deferred tax assets	$	(61.0	)
Adjustment to deferred income tax expense	58.8
Adjustment to regulatory assets	2.2

Spire Alabama’s significant items comprising the net deferred tax asset reported in the Balance Sheets as of September 30 were as follows:

	2018		2017
Deferred tax assets:
Reserves not currently deductible	$	5.3	$	6.0
Pension and other postretirement benefits	—		4.4
Goodwill	129.6		214.4
Operating losses	86.0		88.3
Total deferred tax assets	220.9		313.1
Deferred tax liabilities:
Relating to utility property	111.9		119.3
Pension and other postretirement benefits	1.8		—
Other	5.4		8.2
Total deferred tax liabilities	119.1		127.5
Net deferred tax asset	$	101.8	$	185.6